News

The AICPA and the National Association of State Boards of Accountancy (NASBA) has released an exposure draft that, if approved, would prove a mechanism for holders of foreign credentials to be licensed as CPAs in the U.S. Currently, the AICPA and NASBA maintain six "Mutual Recognition Agreements" (MRAs) that recognize that specific credentials in certain foreign jurisdictions are functionally equivalent to the CPA designation, and so allows their holders to apply for state licensure as a CPA. However, said the exposure draft, "existing differences in licensure requirements as well as political hurdles have made the development of functioning MRAs extremely difficult to achieve."

Recognizing that there are foreign accountants whose qualifications meet or exceed those expected of a U.S. CPA, the NASBA and AICPA have proposed a new system that dispenses with securing individual MRAs in favor of a singular path to recognition. Under this proposed system, the NASBA/AICPA International Qualifications Appraisal Board would evaluate a foreign designation in order to make sure its requirements are substantially equivalent to or higher than the requirements for CPA licensure. If approved, holders of that foreign designation would be able to be awarded a CPA license if they pass the International Qualification Examination.

"As foreign professionals are working in the United States, bringing them under the jurisdiction of the State Boards would strengthen public protection. This would allow for increased transparency as those who are qualified to sign financial reports could sign them. It is in the public interest to license qualified individuals, without regard to whether the foreign authority reciprocates, therefore, the international pathway would make the quid pro quo licensing requirement obsolete," said the exposure draft.

The NASBA and AICPA are accepting comment son the exposure draft until Sept. 1.